Melbourne Federation Square Project - Case Study Example

Project Analysis Name Course Tutor Date of Submission Project Management: Project analysis Report: Melbourne Federation Square Executive Summary This project report seeks to explore the project management issues that arise within the course of implementation of a project. I chose to examine the Melbourne Federation Square project in particular because it is an indigenous project that sparked a lot of public interest. The project ran from 1997 to 2002 though it was scheduled to be finished earlier. The main stakeholders are the City of Melbourne, the Government of the state of Victoria as well the Commonwealth government. The main aim of the project was to bring down two buildings that were a bother to the environment and bring up a park and a museum for recreational use as well as raise revenue for the stakeholders. This report contains a brief overview of the project’s scope followed by a report on what stakeholders thought of the project. The implementation stage is also examined to provide discussion points in the analysis in the fourth section. Today, the Square is complete and receives millions of visitors and is sure an icon for conservationists who were vocal throughout construction to ensure the project captured the heritage of the indigenous people who once settled there. Table of Contents Executive Summary.........................................................................................................3 Table of Contents.............................................................................................................4 Brief Introduction.............................................................................................................5 Stakeholder’s Report........................................................................................................5 Implementation.................................................................................................................6 Critical Analysis...............................................................................................................7 Conclusion.......................................................................................................................8 References.......................................................................................................................9 Brief Introduction on the Project The Federation Square in Melbourne, Victoria is a great museum harbouring the culture of the Australian people. It was opened in 2002, over five years after a tender for construction was issued (Fed Square 2013). There precinct was meant to be a crowd puller with a capacity to hold over 15,000 and built on over 3 hectares of land. The project would see the demolition of two buildings considered a nuisance and the construction of a museum as well as a park for recreation purposes. Two companies- Lab Architecture Studio from the U.K and Bates Smart from Australia jointly won the tender to construct the masterpiece (Fed Square 2013). However, its construction was no doubt filled with controversies given that initial cost plummeted over several times over the initial estimated $120 million (Fed Square 2013). By the end of the project, over $450 million had been spent sparking huge outcry from the public since these were public funds. The Victoria government and the City of Melbourne were the chief sponsors but donations were also received throughout the life of the project. Still, the project remains a cultural landmark rivalling other grand museums and constructions including the Sydney Opera House. With giant screens to broadcast major events including sporting ones, it is a sight to behold when full to capacity (Fed Square 2013). Stakeholders Report As stated the government of the state of Victoria and the City of Melbourne were the main sponsors of the project. The Labour Government was particularly keen to see the project completed before the end of their tenure and it is believed the project was actually accelerated in the final months. The role of oversight was vested in Federation Square Management Pty Limited on behalf of the state government (Fed Square 2013). Lab Architecture and Bates Smart had always held that the initial budget of the project was unrealistic and had to be readjusted. However, their estimates-$240 million, were only 120 million dollars in excess of the initial budget. Though the management agrees that the project did run out of hand in terms of the budget, they viewed that as unavoidable. According to them, given the national interest in the project and the significance of the project, it was absolutely necessary to ensure everyone’s views were heard especially on the design (Deeprose, 2002). The stakeholders however credit themselves with getting the project on its feet and funding the final stages of the project. In fact, the final donation by the government was in April 2002 yet construction continued way after its opening in October the same year. The claims that the project was worth the money may be true given that until 2012, the square had hosted over 56 million visitors worldwide and received many accolades in the tourism sector (Fed Square 2013). Implementation The project began in earnest in 1998 with the demolition of the infamous ‘Oil and Natural Gas’ buildings. The change of guard into a Labour Government had a major impact on the schedule of the project. The public had complained that some of Lab Architectures designs blocked views to other iconic places in Melbourne. The Labour government with a view of honouring these interests allowed adjustments to be made to the design and this led to delays in the implementation of the project. This is one of the factors that led to the inflation in the initial costs (ABC 2002). The design of the buildings was meant to capture the idea of a federation with people being able to access it from all directions thus creating a sort of meeting point for people from all directions. The project was also meant to connect with the Central Business District of Melbourne eliminating the barriers that existed before in railway lines. The project mainly utilized granite as well as zinc and glass to clad the structures of the buildings (The Age 2013). By the first quarter of 2002, the project was two years behind plan and the state government had to donate $56 million to ensure its completion in August of the same year (Fed Square 2013). Further, the government was forced to amend some of the loans to the project to simple grants in order to bail the project. New accounting officers had to be outsourced after parliamentary advice to ensure there was no misappropriation in the project (ABC 2002). In a parliamentary report on public sector agencies, it was recorded that some of the contractors protested over holdups in the release of their dues. Further, the main reason cited for the increased course were the consequences of delays especially given that there was no ceiling on the amount to be spent on the project (The Age 2013). Delays have contractual consequences for workers will demand wages for extra days, storage costs for materials will increase, the costs of materials are bound to change with time among other risks that the project exposed itself to. Lackluster coordination of the human resources was also pointed out as a cause for delays. The building finally opened on 26th October 2002 after a significant portion of the works had been completed. By leasing some of the completed structures, the project could now fund the remaining parts of the project (Fed Square 2013). Critical Analysis Although the Federation Square is fully operational, the challenges faced and eventual completion no doubt leaves lessons to take home. A good project needs to be flexible to allow amendments if need be, but the effects should not be too great as it was the case in Melbourne. Delaying projects for over two years will obviously affect the budget. Contingency plans ought to take care of unforeseen happenings so that these delays are avoided (Heerkens 2002). According to Raymond and Bergeson (2008) the measures of successful projects are the quality of output, adherence to schedule and budget. No major complaints were raised about the quality of work at Federation Square but the rest is subject of discussion. The failure to incorporate the views of the public at the design stage is what elicited such outcry over the designs and their suitability. In particular, a design of a building by Lab Architecture studio received criticism over its blocking of the view of St. Paul’s Cathedral form the Princess Bridge (The Age 2013). It therefore seems that although the project was meant to capture a cultural theme of the Melbourne people, this was not taken to account at the planning stage. Questions still linger on whether the plan, time allocated and indeed the budget were realistic and befitting of the project of such magnitude. Even at the onset, the two companies who were to carry out the design and implementation were not in agreement with the budget estimates. The planning was therefore not all inclusive since the contractors would have been in a better position to advice on the timelines and costs as well (The Age 2013). Such misunderstandings would also lead to the conclusion that perhaps the project was too ambitious altogether. No records are shown of the involvement of experts with experience of management of such a huge infrastructure project in Australia. The interference of the works by the new Labour Government also leaves a lot to be desired. While they managed to get the designs changed to what people truly desired, a cost benefit analysis ought to have been carried out before such a move. The delays caused and budget escalations were enough to carry out a similar project to completion (ABC 2002). Again, no caps were put to limit the budget. This meant the project was at liberty to ask for more funding from the state of Victoria whose administration willing to provide the funds just to see the project completed. The Prime Minister Kennet administration was criticized for these faults (ABC 2002). Complaints about dishonoured payments by contractors do not reflect well on the management of the project. The company mandated to oversee the project on behalf of the state can be faulted for failing to fully stamp its authority and find faults in time to avert delays. However, the interference from the executive cannot be ignored. As a project manager, one needs to put in control measures for the project in order to ensure integrity in the running of the project (Lock 2007). Political influences are also seen here as a cause of delays in completion of projects and needs to be avoided at all costs. For instance, the project was accelerated in its final months since the government wanted it done before the elections whereas they had caused the delay in the first place. Conclusion This project though now being accepted by the people will remain infamous for the cost burden on the people. It sure highlights the importance of proper groundwork at the planning stage to ascertain the budget estimates and timelines. The views and input of all stakeholders must be honoured to avert delays as witnessed. Managers of projects must at all costs shun political influence in projects while the political class should be encouraged to exercise restraint (Project Management Institute 2004). Projects must adhere strictly to the timelines and budgets but both have to be flexible enough to allow for minor adjustments. To this end, there must be a strong oversight body or person to ensure strict adherence to the scope of the project. The best days of Federation Square have been past completion with the many visitors both physical and virtual. This goes to show the importance of a post-completion plan since the project still requires proper management. REFERENCES ABC 30 June 2002, 7.30 Report - 30/07/2002: Budget blow-out on Melbournes Federation Square . (Online) Available from http://www.abc.net.au/7.30/content/2002/s635781.htm [Accessed 9th May 2013] Deeprose, D 2002, Project management. Oxford, U.K., Capstone. Fed Square 2003, History + Design- Fed Square. [Online] Available from http://www.fedsquare.com/information/about-us/history-design/ [Accessed 9th May 2013] Heerkens, G 2002, Project management, New York, McGraw-Hill. Howes, N 2001, Modern project management successfully integrating project management knowledge areas and processes, New York, AMACOM. Kerzner, H 2001, Project management a systems approach to planning, scheduling, and controlling, New York, John Wiley. Lock, D 2007, Project management, Aldershot, England, Gower. Project Management Institute 2004, A guide to the project management body of knowledge (PMBOK guide), Newtown Square, Pa, Project Management Institute. Raymond, L, and F Bergeron 2008, Project Management Information Systems: An Empirical Study Of Their Impact On Project Managers And Project Success, International Journal of Project Management, 26(2), 213-220. The Age - Business, World & Breaking News | Melbourne, Australia 7th June 2003, The battles behind the Square - theage.com.au. [Online] Available from http://www.theage.com.au/articles/2003/06/06/1054700387426.html [Accessed 9th May 2013] Read More